The job losses, all in part-time work, were the most since
October 2011, Statistics Canada said today from Ottawa. The
jobless rate rose to 7.3 percent from 7.2 percent in June.
Economists projected the unemployment rate would remain
unchanged at 7.2 percent and that employment would increase by
6,000, according to the median in a Bloomberg News survey of 25
economists.

Investors pared bets Bank of Canada Governor Mark Carney
will raise borrowing costs with odds of an increase by April
falling to 33 percent at 10:53 a.m. in Toronto, according to
overnight index swaps. That’s down from 45 percent just before
today’s release. Yields of Canada’s two-year government bonds
declined to 1.13 percent, from 1.16 percent late yesterday.

“Governor Carney wasn’t particularly close to raising
interest rates any time soon and the trend over the last few
months towards softer employment growth is consistent with him
wanting to wait quite a while before moving on that threat,”
Avery Shenfeld, chief economist at Canadian Imperial Bank of
Commerce, said in a telephone interview from Toronto.

“We certainly don’t see any prospect of a rate hike from
the Bank of Canada this year and potentially right through next
year if the global economy doesn’t significantly accelerate,”
Shenfeld said.

Three-Month Decline

The July drop means Canada’s economy has lost a net 15,400
jobs since the start of May, the worst three-month performance
since the end of last year.

Carney has kept his key lending rate at 1 percent since
September 2010, the longest pause since the 1950s, and in July
cut his economic growth forecast citing global weakness and the
weakest export recovery since World War II.

In an interview with British Broadcasting Corp. broadcast
yesterday, Carney said higher borrowing costs may be required
because Canada is in a “very different place” than economies
like the U.K. that are in crisis.

Canada’s dollar, nicknamed the loonie, fell 0.11 percent to
99.22 cents per U.S. dollar in Toronto. One Canadian dollar
buys $1.0076.